TikTok ban measure signed by Biden. Here's what could happen next.
TikTok users could soon find that the popular social media service is either under new ownership or, although it wouldn't happen immediately, outright banned in the U.S.
The Senate late Tuesday passed a broad legislative package that delivers $95 billion in foreign aid to Ukraine, Israel and other U.S. allies. The bill, which had already been approved in the House, also includes a provision that could lead to a ban on TikTok in the U.S. if the popular platform's Chinese owner doesn't sell its stake within a year.
President Joe Biden signed the bill into law on Wednesday.
TikTok has attracted unwanted scrutiny not only for the addictiveness of its constantly scrolling videos, but also due to its Chinese owner, ByteDance. That has raised concerns among lawmakers and security experts that the Chinese government could tap TikTok's trove of personal data about millions of U.S. users.
Meanwhile, TikTok had asked its users to contact their lawmakers to argue against the bill's passage, an effort that failed to sway opinions in Washington, D.C., noted Eurasia Group director Clayton Allen.
"It's a low-cost exercise if you have access to the user base," Allen told CBS MoneyWatch. "But it seems like it has backfired."
In a statement, TikTok said it is "unfortunate" that lawmakers are "using the cover of important foreign and humanitarian assistance to once again jam through a ban bill that would trample the free speech rights of 170 million Americans, devastate 7 million businesses, and shutter a platform that contributes $24 billion to the U.S. economy, annually."
In an internal memo obtained by CBS News, TikTok executive Michael Beckerman called the legislation "unconstitutional" and warned that the company will pursue a legal challenge once it's signed by President Joe Biden.
"At the stage that the bill is signed, we will move to the courts for a legal challenge," Beckerman, head of public policy for the Americas at TikTok, wrote. "We'll continue to fight, as this legislation is a clear violation of the First Amendment rights" of TikTok users.
Here's what to know about what could happen next to the TikTok bill.
Why does Congress want to ban TikTok?
Actually, lawmakers want ByteDance to sell its stake in TikTok. Barring such a deal, the legislation would, in fact, ban the social media app in the U.S.
Lawmakers are increasingly concerned about the company's ties in China, with fears that ByteDance or TikTok could share data about U.S. users with China's authoritarian government.
"The idea that we would give the Communist Party this much of a propaganda tool, as well as the ability to scrape 170 million Americans' personal data, it is a national security risk," Senator Mark Warner, a Virginia Democrat, said on CBS' "Face the Nation," on Sunday.
What is the timeline for a possible TikTok sale or shutdown?
The bill would give TikTok's owner nine months to arrange a sale, with the potential for an additional three-month grace period, according to a copy of the bill released earlier this month.
But, Allen of Eurasia Group noted, that would put the nine-month mark in mid- to late January, which could also coincide with the U.S. presidential inauguration. If former President Donald Trump wins in November, he could very well take a different tack with TikTok, the analyst noted.
"This might become a question for the next administration," Allen said. "Looking at the language of the bill, I'm not sure Trump would be as bound to pursue what the Biden administration would want. He could use it as a point of leverage with China."
If TikTok is sold, who might buy it?
Likely bidders include Microsoft, Oracle or private equity groups, according to Wedbush Securities analyst Dan Ives. Former Treasury Secretary Steven Mnuchin also told CNBC in March that he planned to assemble an investment group to bid for TikTok.
However, Ives thinks ByteDance would be unlikely to sell TikTok with its core algorithms, the vital software that provides video recommendations to users based on their interests and viewing habits.
"The value of TikTok would dramatically change without the algorithms and makes the ultimate sale/divestiture of TikTok a very complex endeavor, with many potential strategic/financial bidders waiting anxiously for this process to kick off," Ives said in a research note.
Could other social media platforms benefit from the bill?
Rivals such as Meta could benefit from the bill if it becomes a law, Ives noted.
Wedbush estimates that roughly 60% of TikTok users would shift to Meta's Instagram and Facebook if TikTok went dark in the U.S. Google would also benefit, he added.